The freight brokerage and logistics services provider Echo Global Logistics this week acquired the Watsonville, Calif.-based transportation broker One Stop Logistics for $37.3 million.
Effective immediately, One Stop will begin doing business as Echo Global Logistics. One Stop was founded in 1998 and is a non-asset provider of both less-than-truckload and truckload solutions, with offices in Northern California and Florida.
Steve Brown, a 15-year veteran of One Stop, will be Echo's newest regional vice president, leading all operations of the newly acquired entity. All existing management and employees will remain with Echo subsequent to the acquisition.
"One Stop is a profitable and impressive operator in the market for over the road transportation solutions," said Doug Waggoner, chief executive officer of Echo Global Logistics. "With this acquisition, we continue to position Echo for further growth by expanding our national coverage and leveraging our technology, our carrier network and our service offering."
Echo’s business growth model is built primarily upon acquiring like-minded and successful smaller brokerages, keeping their management teams intact.
During the prior twelve months, One Stop grew total revenue by approximately 14 percent, to $50.7 million, with earnings before interest, tax, depreciation and amortization of $4.3 million.
Nearly $20 million of the purchase price was paid at closing, while $13.8 million is payable in January 2015 and $3.7 million is payable in one year, pursuant to the terms of an earn-out arrangement.
In an earnings note, Nate Brochmann of William Blair characterized the transaction as a nice gain for Echo.
"It expands its revenue base by about 5 percent and extends its presence on the West Coast," he wrote. "The purchase price was a little on the high side relative to what Echo has paid historically, but this was a more sizable deal, and given the increased competition in the space and recently better performance, it is justified, in our view."